How is Aging in Place like Tesla?

by Louis on April 8, 2016

Tesla is making news…again! I can’t help being impressed by Elon Musk. He is a visionary, a manager, knows his way around technology, engineering, innovation, marketing and government incentives. The video introducing the Model 3 speaks loudly about leverage. Technology, human, finance. Musk consistently makes more by leverage. We should take all the advice we can get from a guy who does so much. How is Aging in Place an opportunity for leverage? Let’s think about Musk and Tesla and apply it to Aging in Place.

Musk speaks about his “secret master plan”, including a significant iteration from three stages to four. The original, expensive, Roadster was produced at very low volume. But Musk credits leverage from the Roadster demonstrating the techo-capability with pushing the Chevy Volt and Nisan Leaf as well as Tesla’s own success. Now, revenue and experience with the moderate production and high priced Models S and X is being leveraged to produce the higher volume and lower priced Model 3. These cars generate a substantial tax incentive to the purchaser. Whether you own a Tesla or not, EVERY American helped fund the subsidy levers leading to Tesla’s success. Sales success became financial leverage for the well subsidized battery factory and well financed Tesla growth.

Tesla has already started and tested their radical non-dealer network ready for expansion. The charging network is started but will grow. These are necessary to get cars into consumer hands and all around the country. Of course, much of the infrastructure theyneeded: roads, traffic lights and regulations, the GPS network, the power grid as well as the tire and body shop sector were levers waiting to be pushed.

The most effective Aging in Place leverage is the human capital behind our family and informal caregivers. Millions of family caregivers give their time, energy and love day in and day out 24 hour a day. By keeping people in homes and community the tasks these heroes accept without payment are made quite a bit easier. Most middle income families pay out of pocket for goods and service as well.

In 2013, about 40 million family caregivers in the U.S. provided an estimated 37 billion hours of care…… The estimated economic value of their unpaid contributions was approximately $470 billion in 2013, up from an estimated $450 billion in 2009.*

Nearly half of caregivers spent more than $5,000 a year on out-of-pocket caregiving costs. More than one in four (27 percent) spent up between $5,000 and $19,999.^

Everything we do to maintain this miracle is leverage incredibly well spent!

Our homes are a $27.5 TRILLION national infrastructure already owned by widely distributed small scale investors (homeowners). To the degree we leverage this existing asset to house and care for the huge older population we are beginning to face we don’t have to build it. We already financed it through mortgage interest loans, leverage almost every American has contributed to – and of which they have taken advantage. Who gets the advantage of this huge lever? Anyone who delivers service in these homes. That includes health and health care, meals and more. We, as a nation, feel pretty responsible for housing our older citizens. We already helped pay for these homes. Now we get to use them again. If we update them age friendliness we are readying the infrastructure for the millenials…an even larger cohort of soon to be older citizens coming right behind us.

Right now, programs that fix the homes of these older citizens are primarily limited to the most vulnerable -those eligible for Medi-caid. No question there is need, but there is also no leverage. These homeowner can barely afford their medications, meals and heat. They can’t pitch in for home modifications. Homes Renewed takes a different approach, driving policy to incentivize middle and upper middle income Americans to invest their own money to pay most of the bill. The potential leverage is huge.

Home Renewed is a social lever as well. It is now pretty clear we cannot expect people to ‘pull themselves up by their boot straps’, ‘demand their independence’, and ‘take personal responsibility’ about their own aging futures. But appealing to their civic responsibility, their desire to upgrade and maintain their homes at lower than the full market cost, and even to keep up to their neighbors are levers and appeal pushing infrastructure transformation to meet our societal needs.

Archimedes said given a place to stand, a large enough lever and use of a fulcrum he could move the world. You don’t have to look further than Musk’s overwhelming pre-order sales to see a leverage master at work. Aging in Place can be the same tool if we are smart enough to take advantage. We can do it. Levers like this have been used for social policy throughout history. This is just the latest need and responsibility.

Louis Tenenbaum, one of the nation's leading authorities on aging in place, is the founder of HomesRenewed, a coalition of business, consumers and nonprofits, driving policy and investment to increase the number of age-friendly homes.